Within the total number of customers of the local Rabobanks who took out mortgage loans in
2013,62% have life insurance, whereby the mortgage will be paid off in full or in part in the
event of their death. A further 22% of new mortgage customers have mortgage protection
insurance as well as life insurance, meaning that for a certain period, they will receive financial
support to meet their mortgage payments in case they become unemployed or unfit for work.
Despite the fall in house prices, the weighted average loan-to-value (LTV) of the mortgage
portfolio was unchanged in 2013 at 81% (81%).This was due to additional repayments,
mortgage conversions and an increase in the amount of pledged savings.The LTV exceeds
100% for approximately 21% of the mortgage portfolio, excluding NHG.The LTV calculation
takes account of pledged assets.
Mortgage advice
Mortgage advice includes assessing the affordability of the loan for the residential property,
in terms of the customer's ability to continue to repay the loan in a range of situations such
as unemployment, divorce or disability. The financial impact of those risks is discussed
with customers during the mortgage advice interview. Customers can take out insurance
for those risks.
The ban on commissions came in to force as of 1 January 2013, which means that the costs of
advice are billed separately to customers.
Payment problems
The local Rabobanks and Obvion aim to prevent payment problems for mortgage customers
wherever possible.This is in both the customer's interest and in the bank's interest, and
obviously begins with suitable advice and an appropriate mortgage. It is followed up by regular
assessment during the term of the mortgage loan whether the mortgage is still appropriate for
the customer's personal circumstances. Nevertheless, it may become impossible for customers
to continue paying their housing costs, due to changed circumstances.
At year-end 2013,0.55% of the total of over 1.2 million mortgage loan customers of Rabobank
Group had incurred payment arrears of 90 days or more. In most cases, the customer and the
bank jointly reach a solution and customers can continue to live in their home. Rabobank wants
to consult customers quickly in the event of (possible) arrears to discuss the situation and seek
an appropriate solution. There are options for giving customers additional headroom by means
of a repayment schedule or by using a budget coach. No recovery proved to be feasible for 0.28%
of the mortgage loan customers as there was no prospect of continuing the mortgage loan on
a lasting basis. It was decided to sell the property in those cases. Preferably, this is done jointly
with the customer by means of a private sale. Public auctions are only used in exceptional cases.
In 2013 Rabobank, as one of the initiators, teamed up with the sector organisation for debt
assistance (NVVK) and mortgage lenders. In addition, the information desk Schakel! was
established, a platform for providers of debt assistance and mortgage lenders to consult each
other and customers at an early stage and exchange information to deliver effective support
for customers.
Bad debt costs
The decline in purchasing power, rising unemployment and falling house prices led to an
increase in impaired loans to EUR 893 million. Value adjustments in the mortgage portfolio
increased to EUR 127 (113) million in 2013. However, at 6.1 (5.6) basis points annualised, bad
debt costs are still very low. An amount of EUR 103 (81million was written off in the mortgage
portfolio. The proceeds from homes sold by private and public sale versus receivables slightly
improved last year to 88% (86%). The improvement is the result of the increase in private sales
in proportion to public sales.
41 Broad range of services in the Netherlands
